Digital marketing has to do with marketing your products or services using the internet, mobile phones, display advertising, and other digital media. The best way to measure the success of your digital marketing campaign is by calculating Return on Investment (ROI).
According to Investopedia, ROI is:
is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.
Measuring your return on investment (ROI) for any given marketing strategy helps you identify whether you’re getting the value of your money from your efforts and also helps you to allocate your budget effectively.
In this article, I’d be sharing how you can measure and improve your online marketing ROI.
1. Conversion rate
Conversion rate is an important metric to evaluate an online marketing campaign.
Conversion rate is the percentage of visitors that complete your desired action compared to the total number of people that could have converted. With digital (online) marketing, your conversion rate is not just sales. It can be the number of downloads or the number of people who signed up for a consultation.
A high conversion rate simply means a successful digital marketing campaign.
2. Cost Per Acquisition (CPA)
Cost Per Acquisition is also known as Cost Per Action. It is the metric that identifies the cost an advertiser pays when a specific action has been made. It could either be a click, an actual sale, or form submit.
3. Customer Lifetime Value (CLV)
CLV measures the amount of gross profit that is acquired from a person over the entire time they do business with your company. It helps in determining the amount an individual will spend on your company throughout their lifetime. CLV aids businesses to achieve long-term goals.
When you know your customer lifetime value, you can improve it.
4. Revenue on Ad Spend (ROAS)
ROAS is calculated in percentage by dividing the revenue generated by the total amount spent in the campaign. It measures the effectiveness of your digital marketing efforts. The higher your ROAS, the better!
5. Lead close rate
It is very important to monitor the number of leads that eventually turns out to sale. This metric gives your company insight into how well they are at converting leads into actual sales.
The lead close rate is calculated by comparing the number of closed leads with the total number of leads generated.
So after you measure your online marketing campaign ROI, how do you improve your next marketing campaign?
- Set goals.
- Monitor your campaign.
- Run test ads before launching a full campaign.
- Identify whats works for you best, is it email marketing, social media marketing, SEO?
- Identify your target audience and direct your campaign at them.
Conclusion
Remember that the metrics you use in measuring your return on investment will greatly depend on the goals you set and the channels you are using to execute. Also ensure your goals are SMART = Specific, Measurable, Attainable, Realistic and Time-bound.
We really hope you’ve found this article helpful.
If you need help or guidance in improving your digital marketing, simply Contact Us. We’d be happy to assist.
Do you have questions or comments concerning digital marketing? Please feel free to leave a reply below.
